State regulators have ordered four Northern California cemeteries to stop operations amid allegations of financial mismanagement.
Mount Tamalpais Cemetery and Mortuary in San Rafael and three other memorial sites under the same ownership received cease-and-desist demands from the Cemetery and Funeral Bureau, part of the California Department of Consumer Affairs. The others are Skyview Memorial Lawn in Vallejo, Chapel of the Light in Fresno and Evergreen Cemetery in Oakland.
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The state directives, dated March 24, ordered the sites to stop “conducting any cemetery business, including internments and selling cemetery property.” Each cemetery also was fined $5,000 for continuing operations after surrendering their licenses last year.
The action was the latest development in a long-running effort by state regulators to bring management of the cemeteries into compliance with state law. The bureau has seized $52 million in “endowment care funds” that are reserved for the care and maintenance of the four cemeteries.
The bureau acted after it learned that Buck Kamphausen, whose companies owned the four cemeteries, was preparing to transfer control of the funds to Evergreen Ministries, a purported tax-exempt, nonprofit religious organization. Such organizations are exempt from regulation by the state bureau.
Kamphausen and associate Joshua Voss are officers of Evergreen Ministries. At the time, the state bureau was in the process of disciplining Kamphausen on allegations of not filing mandatory yearly reports, mismanaging endowment care funds and failing to properly maintain cemetery grounds.
In a ruling in January, a judge in Solano County upheld the bureau’s move to confiscate the funds. Judge Christine Carringer said testimony revealed a persistent pattern of commingling money between endowment care funds and checking accounts from cemetery to cemetery.
“In all,” Carringer wrote, “the picture that developed was of a complicated large-scale scheme of financial mismanagement, whether deliberate or unintended, directed and controlled by a single person: Buck Kamphausen.”
Kamphausen said Wednesday that he is appealing the confiscation. He said the bureau has released no endowment care funds to him since taking possession of the money.
“Everything they’ve said has been a lie,” he said. “It’s a situation they dreamed up. I have a letter from the Internal Revenue Service that says Evergreen Ministries is a valid church.”
Kamphausen said both he and Voss are ministers.
“Mr. Voss has performed marriages,” he said.
Regarding the fact that some of the headstones at Mount Tamalpais Cemetery are tipping or falling over, Kamphausen said, “We don’t own the tombstones. It’s not our business to straighten them.”
Jack Thornton, the manager at Mount Tamalpais Cemetery, said he has continued to report to Kamphausen even though Kamphausen surrendered his license.
The state bureau dispatched its cease-and-desist orders after Assemblymember Damon Connolly sent a letter to its director, Gina Sanchez, on March 11.
“It is my understanding that the same management is still in charge of running the cemetery, despite lacking a valid license and having demonstrated a history of blatant misconduct and financial impropriety,” Connolly wrote.
Connolly, whose district includes Marin and part of Sonoma County, urged the bureau “to act swiftly to remedy these issues.”
In her email reply, Sanchez made no mention of the cease-and-desist orders to come, but said the agency would assign a corporate trustee pursuant to perform an audit. She said she didn’t know how long that would take.
“In regards to maintenance,” Sanchez wrote, “the cemeteries in question are unlicensed and therefore no longer fall under the bureau’s jurisdiction, as the bureau’s authority is limited to conserving and protecting the funds once there is no longer a licensee.”
Congregation Kol Shofar in Tiburon has taken an active role in trying to improve conditions at Mount Tamalpais Cemetery. Kol Shofar purchased 1,200 plots there in 1989 and has been selling them back over time to congregants.
Kevin Frankel, an attorney representing Kol Shofar, said there is a reason why the Cemetery and Funeral Bureau was reluctant to shut down the cemeteries.
“This is a hot potato,” Frankel said, “Nobody wants to deal with the issue because there isn’t enough money there to fix the problem.”
During the Solano County court hearing, Carringer found that Kamphausen failed to invest the cemeteries’ endowment care funds prudently. Instead of using the money to buy stocks, Kamphausen chose a variety of investments, including residential and commercial real estate and gold, which comprised 2% of the endowment care funds. Some of the real estate purchased belonged to Kamphausen.
Frankel said that as a result of these poor investment decisions, there is less money available to maintain the cemeteries than there should be.
During the hearing, Bruce Gribens, an attorney, accountant and partner at Deloitte, testified that with proper management, the endowment care funds of Mount Tamalpais Cemetery alone would likely have amounted to nearly $24 million today, versus the $5.9 million in the account.
“Anyone who takes this thing on is taking on a liability, not an asset,” Frankel said, “which is how you end up with abandoned cemeteries.”
Under state law, a county may take over maintenance of an abandoned or unlicensed cemetery, but because it is optional no county has done so. State Sen. Laura Richardson, D-San Pedro, has introduced Senate Bill 777 to address the issue. A graveyard in her district, Lincoln Memorial Park Cemetery, has been abandoned.
According to analysis for the bill, there are seven abandoned cemeteries in California, counting the four recently closed by the Cemetery and Funeral Bureau. Another 43 have underfunded endowment care funds with limited space to sell.
Richardson’s bill would require that a local agency formation commission identify an entity to take over the operations of cemeteries that have endowment care funds and had their license surrendered or revoked. The mandate would become effective if a new cemetery authority failed to assume ownership within one year.
The bill would allow the agency assuming control to expend the principal from the endowment fund in addition to income earned if necessary.
“But local agencies will face the same fiscal challenges that discourage private cemetery managers from taking over abandoned cemeteries: insufficient funds for care, maintenance and embellishment of the cemetery,” the analysis says.
Frankel said the fire risk that cemeteries such as Mount Tamalpais Cemetery pose might make neglecting them more expensive for local governments than maintaining them.
San Rafael Mayor Kate Colin, commenting on SB 777, said she supports “the direction it’s headed.” But she said the county would be the jurisdiction to assume management of the cemetery.
Marin County Executive Derek Johnson said, “I have not heard directly from local residents regarding Mount Tamalpais Cemetery, and I have not had any discussions with Assemblymember Connolly or Mayor Colin about the status of this private cemetery.”
Johnson added that the California State Association of Counties, the Rural County Representatives of California and the Urban Counties of California oppose SB 777.
“Their opposition is likely due to the fact that the bill would impose a new, unfunded mandate on local governments,” he said.